Gold drops below $1,800, settles at lowest level in more than a week as dollar rebounds
By Myra P. Saefong and Joseph Adinolfi
Copper logs biggest daily drop in nearly 2 weeks on weak China data, rate cuts
Gold futures dipped below $1,800 an ounce on Monday to settle at their lowest price in more than a week amid a broader pullback in commodity prices as the U.S. dollar advanced.
What analysts are saying
Treasury yields fell Monday, implying a shift to a "risk off" mode following a torrid four-week rally for the S&P 500 , but U.S. benchmark stock indexes gave up early losses to turn higher in Monday dealings.
Some analysts blamed the sour mood in gold on weak economic data out of China, along with surprise interest-rate cuts from the country's central bank.
See:China's central bank cuts key policy rates
Meanwhile, Marc Chandler, chief market strategist at Bannockburn Global Forex, blamed the pullback in gold on the renewed strength in the U.S. dollar. The ICE U.S. Dollar Index, a gauge of the greenback's strength against a basket of its main rivals, was up 0.8% in Monday trading after falling to its weakest level in a month late last week.
Gold's move lower is just a "technical play with bond yields and the U.S. dollar index a price dictator for gold," Chintan Karnani, director of research at Insignia Consultants, told MarketWatch.
Gold's failure to trade over $1,800 an ounce has also led to profit-taking, he said. Gold has to show signs of forming a lower price base at $1,800 to attract short-term investors," he said.
Meanwhile, financial markets in India were closed Monday in celebration of Independence Day and Karnani said he believes gold's price decline was partly due to that closure. When Indian markets reopen Tuesday, Indian gold demand should lift prices for the precious metal, he said.
In other markets news, bitcoin also tumbled on Monday, trading just north of $24,000, after briefly breaking above $25,000 per coin for the first time since stocks and crypto bottomed in June.
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-Myra P. Saefong
(END) Dow Jones Newswires
August 15, 2022 14:05 ET (18:05 GMT)
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